06. May 2021 | 10:00 CET
Nel ASA, Scottie Resources, Nordex - Is the bubble bursting?
It was just a matter of time. For weeks now, the Federal Reserve under its Chairman Jerome Powell has been repeating that it wants to continue its ultra-loose monetary policy until at least 2023 despite the strong recovery of the economy and rising inflation. According to Janet Yellen, higher interest rates may be necessary to prevent the economy from overheating due to President Joe Biden's massive investment programs. The result was enormous price losses, especially for growth companies. Does this signify a turning point?
time to read: 3 minutes by Stefan Feulner
"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Nel ASA - Normalization necessary
There is no question that hydrogen technology is one of the keys to the energy transition. Billions will be pumped into green energy over the next few years by politicians and industry. Nevertheless, the valuations of most hydrogen stocks ran well ahead of the future prospects. As a result, a massive correction in stock market values has been taking place in recent weeks, which could gain further momentum. The gap between reality and vision can be clearly seen in the figures recently presented by Norwegian hydrogen specialist Nel ASA. After a hefty 50% correction, the market capitalization is currently still a proud EUR 2.75 billion.
In contrast, the Norwegians reported the figures for the first quarter of 2021, which incidentally were significantly below the forecasts. Thus, the loss per share was EUR 0.045. Analysts expected a loss of only EUR 0.012. Sales increased from EUR 12.71 million to EUR 15.72 million. Here, too, the experts expected an increase to at least EUR 19.8 million. According to the Company, the order backlog for the full year is steadily increasing. In addition, cooperation with one of the leading solar companies, First Solar, was announced. The two companies intend to expand their joint product offering to provide end customers with hydrogen with the lowest total cost of solar energy.
Chart-wise, the stock is battered after falling below the 200-day line and is ripe for another move south. The hydrogen bubble will not burst. For this to happen, there is still a lot of air to be taken out of the balloon.
Scottie Resources - Best conditions
While technology stocks are still firmly in correction mode, gold mining stocks have most of it behind them. In general, the environment, the fear of a sharp rise in inflation, the loose monetary policy and the high national debt speaks for an investment in gold mining stocks. Scottie Resources, a Canadian gold exploration Company, is in better fundamental shape than ever and is at a 50% discount compared to August of last year. The Company is drilling in the "Golden Triangle" near Summit Lake in British Columbia. The Golden Triangle is one of the most prolific mineralizing areas globally and world-renowned for its high-grade deposits. In addition to the 100% owned Scottie Mine and the Bow property located just 2 km northeast of Scottie Mine, the Company has now secured another prospective project.
AUX Resources is to be added to the portfolio through a share swap. AUX Resources also operates in the Golden Triangle and parts of its properties are directly adjacent to those of Scottie Resources. The former producing mine stands for large gold deposits with grades up to 27.6 g/t. The deal is all the more interesting because AUX Resources recently carried out a capital increase, which Scottie Resources will be able to access in the future. Thus, the new Company's cash balance should be CAD 6 million, enough to fund operations for 2021.
Already in the past two years, above-average results were achieved in all zones. For the full year 2021, drilling is expected to be significantly increased to realize the full potential of the high-grade system. Drilling is scheduled to begin in June at the Blueberry zone and expand to the Scottie Gold Mine and Domino zones later in the season. The target is 12,500m in total. Then, starting in the summer, AUX Resources' newly acquired Georgia project will be explored. Therefore, a continuous news flow at Scottie Resources should be ensured. The Canadians should have already made it onto the list of gold producers for attractive takeover targets. At the current level, it is an exciting Company to speculate on in a rising gold market. You can read a detailed interview with the CEO of Scottie Resources, Bradley Rourke, here.
Nordex - Powerfully punished
In recent weeks, the manufacturer of wind turbines has delivered order after order. As a result, the Hamburg-based company's share price rose steadily from just under EUR 19 to over EUR 29. Then the mood at the technology stock exchanges tipped. Thus Nordex is currently quoted at EUR 21.30. A broad support zone runs at the EUR 21 mark. Due to the strongly oversold situation, a countermovement towards the EUR 25 mark could start from here.